Copper Resources Harvard Case Solution & Analysis

Copper Resources Case Solution

Overview of Mining Industry based on Australian Securities Exchange (ASX):

 The huge mining houses have been working hard on cutting costs, decreasing capital consumptions, and boosting efficiency. Phosphate and some base metals, for example, zinc and copper appear to have a more appealing short-lived perspective.

It has been observed that the copper production has been grown by 40% from 2003 and coal that shows the demand is increasing and the acquisition would be successful and resulted in high profitability and benefits society economically and politically.(Michael Birshan, 2015)

Regardless of investigation, it demonstrates more than a large portion of the mining items examined is more advantageous, Greenfield value administrations before the end of the decade. Worldwide copper supply disorders expanded in the second quarter of 2013.

Hence, in spite of these and different interruptions, 2013 supply development stays positive and it relied upon to remain so all through 2013, with surplus enlarging in 2014. A study by Macquarie Research expects worldwide copper mine supply development in 2014 to approach 7% year over year (YoY), the most noteworthy rate of supply development in 10 years.

1.     How much is the copper? What is the industry trend?

All inclusive, the business sector for copper is one of the biggest of all metals after iron and aluminum. The measure of the worldwide market for refined copper is over U$150 billion each year, Copper has been a material part in the development of human civic establishments for a large number of years.

Factors affecting the price of the copper:(Eugie Kabwe, 2015)

  1. Demand: it is one of the most important factors that affect the price of the copper. As the copper is used in variety of sources such as construction and remodeling that will help to improve the economy. Therefore, as the demand for new construction increases that will increase the use of copper more, so the price changes as the demand changes.
  2. Supply: The major supply of copper are America, Europe and Asia that makes the 90% of the copper produced globally and the supply might be increased or decreased over the time period. Therefore, if the less supply is made then it became precious and the price would be tend to increase.
  3. Commodity prices: In terms of commodity prices, the copper prices is increasing due to increase in demands, falling stocks and the effect of prior limit terminations when costs were low. Solid Chinese and Indian interest development has been a principle contributor to higher costs.
  4. Stockpiles: Stockpiles balance some of those weights on copper costs, might be utilized with more regularity. Copper stockpiles achieved their least levels in six years in 2010, which prompted higher costs that year. For whatever length of time that interest proceeds to outpace creation then copper costs will probably keep on stay high.

The industry trend:

Universally, the copper mining industry is one of the main markets of the metal mining market. The majority of the accessible copper is dispersed over extensive territories, blended with mineralized materials and rocks. Copper minerals experience through various division stages and procedures to create immaculate copper. Significant copper mining countries, for example, Chile and Peru are contributing substantial adds up to help mining profitability levels......................

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